Which of the Following Is NOT True About a Differentiated-Product

question 102

Multiple Choice

Which of the following is NOT true about a differentiated-product Bertrand duopoly?

• A) Firm 1 and firm 2's prices will be equal to marginal cost.
• B) Firm 1's price will always be above marginal cost, while firm 2's price will be less than marginal cost.
• C) Firm 1's price will always be less than marginal cost, while firm 2's price will be above marginal cost.
• D) None of the answers is correct.

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Definitions:

Liability Insurance

An insurance policy that provides protection against claims resulting from injuries and damage to people and/or property.

Merchandising Firm

A business that purchases finished goods for resale, making profit through the markup of those goods.

Period Costs

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.

Inventory Accounts

Accounts used to track the cost of inventory that has been purchased but not yet sold to customers.